Employers are not required to offer insurance to many, if not most, on‐call and temporary workers. To circumvent the mandate, therefore, employers may choose to reduce standard weekly hours below 30 or shift their mix of staffing toward greater use of on‐call, direct‐hire temporaries or agency temporaries. Additionally, employers may choose to outsource certain tasks to firms with fewer than 50 full‐time employees. Ironically, the employer mandate could reduce the quality of jobs for low‐ and mid‐skill workers by increasing the share of low‐hours, part‐time (defined as averaging less than 30 hours per week); temporary; and contract employment—categories that often are associated with relatively low compensation and job instability.
We estimated that the ACA increased low‐hours, involuntary parttime employment by 2–3 percentage points, or 500,000 to 1 million workers, in retail, accommodations, and food services—the sectors where employers are most likely to reduce hours if they choose to circumvent the mandate.
This from a new Cato research paper.